10-QPeriod: Q3 FY2009

AMEREN CORP Quarterly Report for Q3 Ended Sep 30, 2009

Filed November 9, 2009For Securities:AEE

Summary

Ameren Corporation (AEE) reported its third quarter and nine-month results for the period ending September 30, 2009. The company saw an increase in net income for the third quarter of 2009 compared to the prior year, driven by rate adjustments in its regulated utility businesses and lower operating expenses, partially offset by lower sales volumes and decreased margins in its Merchant Generation segment. However, for the nine-month period, net income declined year-over-year. This decline was attributed to several factors, including lower electric and natural gas margins in regulated businesses due to weaker economic conditions and unfavorable weather, higher interest expenses, costs associated with employee separation programs, and a significant goodwill impairment charge recorded by CILCORP. Despite these challenges, Ameren has taken steps to strengthen its liquidity and credit profile, including entering into new credit facilities and completing a significant common stock issuance.

Financial Highlights

46 data points
Beta

Revenue

$1.82B

Net Income

$227.00M

12.4% Net Margin

Total Assets

$23.59B

Cash & Equivalents

$563.00M

Free Cash Flow

$376.00M

Financial Statements
Beta
Revenue$1.82B
Operating Expenses$1.33B
Operating Income$485.00M
Interest Expense$134.00M
Net Income$227.00M
Shares Outstanding (Basic)218.20M

Key Highlights

  • 1Net income attributable to Ameren Corporation increased to $227 million ($1.04/share) in Q3 2009 from $204 million ($0.97/share) in Q3 2008.
  • 2For the nine months ended September 30, 2009, net income attributable to Ameren Corporation decreased to $533 million ($2.48/share) from $548 million ($2.61/share) in the same period of 2008.
  • 3The company experienced lower electric and natural gas sales volumes in its regulated utilities due to unfavorable weather and economic conditions, particularly impacting industrial customers.
  • 4Ameren successfully entered into new multiyear credit facilities in June 2009, providing substantial borrowing capacity and enhancing its liquidity position.
  • 5A significant goodwill impairment loss of $462 million was recognized by CILCORP in the first quarter of 2009.
  • 6Rate cases are pending in both Missouri and Illinois jurisdictions, seeking revenue increases to reflect investments in infrastructure, higher operating costs, and increased financing costs.
  • 7Ameren's common stock offering in September 2009 raised $535 million in net proceeds, strengthening its capital structure through equity contributions to its utility subsidiaries.

Frequently Asked Questions

Net income in Q3 2009 increased compared to Q3 2008 primarily due to higher electric and natural gas delivery service rates in both the Illinois and Missouri regulated segments, lower other operations and maintenance expenses, and favorable net unrealized mark-to-market activity on derivatives. These positive factors were partially offset by lower electric margins in the Merchant Generation segment, unfavorable weather, and reduced sales to industrial customers.

The weak economic conditions have negatively impacted Ameren's business by reducing demand for electricity and natural gas, particularly among industrial customers. This has led to lower sales volumes and reduced margins. Additionally, the economic downturn contributed to a significant goodwill impairment charge recorded by CILCORP and has affected market multiples used in goodwill impairment testing for other reporting units.

Ameren has taken several steps to manage liquidity and capital resources. This includes entering into new multiyear credit facility agreements providing substantial borrowing capacity, completing a significant common stock issuance in September 2009 to strengthen its capital structure through equity contributions to utility subsidiaries, and reducing planned capital expenditures for 2010-2013. The company also reduced its common stock dividend in February 2009 to conserve cash.

Yes, Ameren has pending rate cases in both Missouri and Illinois seeking revenue increases to reflect significant investments in utility infrastructure, higher operating costs, and increased financing costs. The outcomes of these rate cases, including requests for interim rate relief and the approval of cost recovery mechanisms, will be critical in determining future revenue levels and the ability to recover costs.